Recently, the ongoing tussle at Tipsy Collective took a new turn, where the company is alleging $14 million in losses due to misconduct and poor decisions by former directors and an HR head. The new group of major shareholders is alleging that the previous management team made poor decisions that led to the company’s dismal financial position, one of many that was amplified when more than 100 employees were owed their salaries back in Oct 2024 and was only resolved when the new major shareholders pumped in additional liquidity.
This case serves as a stark reminder of the multifaceted risks that businesses face. Beyond operational challenges, other factors such as internal fraud, mismanagement, and breaches of fiduciary duties can lead to devastating financial and reputational damage. It also highlights the risk that many companies, especially the small and medium companies, often overlook.
Having a Directors & Officers (D&O) liability insurance in this case would have protected the personal assets of company directors and officers from lawsuits alleging wrongful acts committed in their capacity as corporate leaders. This includes allegations of mismanagement, breaches of fiduciary duty, or making decisions that negatively impact the company. However, it is important to note that this does not cover instances of fraudulent activities.
For businesses looking to protect themselves from similar perils, do reach out to the team today.